Infosys on Saturday said it has completed its Rs 13,000 crore buyback programme that saw participation from Sudha Gopalakrishnan, Rohan Murty and LIC among others. The buyback scheme -- a first in the company's over three decade history -- commenced on November 30 and closed on December 14. "(A total of) 11,30,43,478 equity shares were bought back under the Buyback at a price of Rs 1,150 per equity share. The total amount utilised in the Buyback is Rs 13,000 crore excluding transaction costs..." Infosys said in a regulatory filing. Because of the buyback, there is a sentiment that the IT major has excess cash, and the investors do not need to worry about the possible cash flow problems. This is likely to strengthen the share price of the stock and provide long-term security for investors.
Five Things To Know About Infosys buyback
1. The share buybacks typically improve earnings per share (EPS) and return surplus cash to shareholders, while supporting share price during period of sluggish market condition. The share buyback is likely to prop up the IT bellwether's share prices. On Friday, the scrip closed at Rs 1,037.85 while the buyback has happened at Rs 1,150.The buyback would leave 11.30 crore fewer outstanding shares in the market. This will translate into higher earning per share.
2. The Infosys Rs 13,000 crore buyback witnessed participation from Life Insurance Corporation (LIC), government of Singapore, co-founder S Gopalakrishnan's wife Sudha and NR Narayana Murthy's son Rohan Murty, among others.
3. The stock market filing showed that of all the equity shares tendered in the buyback, 5.41 per cent were by LIC and 2.18 per cent by Singapore government. Similarly, 15 lakh shares of Sudha Gopalakrishnan and 13.92 lakh shares held by Murty were accepted under the
buyback. As of September this year, Sudha Gopalakrishnan held the largest share in individual capacity among promoters group members with 2.14 per cent shareholding.
4. The promoters group that includes the founders and families held 29.28 crore shares, or 12.75 per cent, in Infosys at the end of September 2017. After the buyback, the promoter group now holds 12.90 per cent share, as per the filing. The buyback had been a long-standing demand by some of the founders and high-profile former executives, who have been pushing Infosys to return surplus capital to shareholders.
5. Infosys' larger rival Tata Consultancy Services (TCS) earlier this year completed a Rs 16,000-crore mega buyback offer. Other rivals such as Cognizant, Wipro and Mindtree had also made similar announcements. ' The share buyback has happened at a price of Rs 1,150 per equity share.